Fast-Growing Local Tech Firm Making International Payments More Convenient

December 10, 2012|By ANNE M. HAMILTON, Special To The Courant, The Hartford Courant

Erica, 24, comes from the Dominican Republic and likes to stay in touch. In a matter of seconds, she can add minutes to her friends' cell phones through a Connecticut company called iSend.

In Hartford for the past 10 years, Erica tries to get home once or twice a year. She has a steady job as a school van driver – but some of her relatives and friends in the Dominican aren't as well off. Using technology that allows instant electronic payments, Erica is one of millions of immigrants who support their families in their countries of origin by paying some of their bills or by "topping up," industry-speak for adding prepaid minutes to cell phones.

"People are moving from country to country and they need a way to take care of family members back home," said Merrick Theobald, director of marketing at iSend, a Middlebury company that recharges cell phones and pays utility bills in about 90 countries, including most of Central and South America and the Caribbean.

Erica estimates that between her friends and her relatives, she is helping about eight people obtain more prepaid minutes on their cell phones. "They text me or they call me," said Erica, who did not want to disclose her last name. "If I have the money, I buy [the minutes.]"

She regularly visits Envios Al Instante, a money transfer office on Park Street, where she can hand over $10 and add 400 pre-paid minutes to her friends' phones in a matter of seconds. iSend works with various retail partners, including PayXchange, Now Prepay, DolEx and Pay-O-Matic, to facilitate direct payments, Theobald said.

Angel Rivera, owner of Envios al Instante, said iSend is very popular with his clients. "It's quicker, more efficient, and cheaper," he said.

iSend has been in the international electronic payments business for only four years, but in 2011, it had gross operating revenues over $40 million, said president and CEO Steven LaBella, a 1992 graduate of the University of Connecticut. Its core business is making payments abroad for people in the U.S. who have families in other countries.

LaBella said iSend is the largest international mobile phone top-up company in the U.S. It handles 11 million transactions a year, and has over 150,000 retail outlets like Envios, mostly in the U.S. It also handles on-line payments through Aryty.com.

"Our service isn't really for U.S. citizens. It's for citizens who come to the U.S and want to support their families back home," LaBella said.

Unlike Western Union, iSend does not remit cash directly to individuals. Instead, the company pays bills and recharges cell phones using technology that LaBella claims is faster, cheaper and more secure than other companies. There is no middleman, and the customer gets instant confirmation that a bill has been paid or that a telephone has been recharged.

Most iSend payments average $10-$15. A bill processing fee, typically between $1 and $1.50 per payment, is charged to the customer, though cell phone companies frequently underwrite that cost. "Our goal is to drive down the cost of moving money around the world," LaBella said.

In September, iSend – with 23 employees, six located in Connecticut – was the over-all winner of Marcum's Tech Top 40 awards, which rewards the fastest growing technology companies in Connecticut. Company officials said iSend grew 5,900 percent between 2008-2011. "It's all about growth," said Matthew Nemerson, president and CEO of the Connecticut Technology Council, an association of state-wide technology companies.

"We select the companies based on the numbers. We want to learn from them…. [and] understand every bit of data we can, whether there are new insights we can glean," Nemerson said. "We have to encourage everyone who could be an entrepreneur to be an entrepreneur, and try to make the pathway easier."

In communities where immigrants live and shop, there are many competitors offering electronic payment services, and iSend intends to dominate the field. "There's lots of competition," said LaBella, who is 42. "What we are doing is differentiating ourselves."

Within five years, LaBella would like to offer international gift cards, with a catalog of international retailers. The service is already available in Mexico, where the card can be used at Elektra, a store comparable to Sears, which sells home goods, electronics and tools. "It's a way to move value around the world in a more efficient way," La Bella said.

LaBella does not track the number of Connecticut clients he has, but transactions spike on the 15th and 30th of the month – payday for many of his clients. Christmas is another busy season.

LaBella said that plans are underway to expand to Saudi Arabia, Spain, Germany, Canada and the United Kingdom. The company does not do business in Syria, Libya or Iraq, and in Cuba, it only deals with telephone recharging. There is no inquiry into immigration status.

The privately held company has raised $4 million from two key capital companies, Village Ventures and Gray Ghost Ventures, based in Atlanta.